So Fred does this mean you are updating from pedal power to gas in your car!
As CTP receipts are to rise to $120m PA and given they are operating @ an income of $30m PA currently, if their operating costs remain fairly stable then it is reasonable to assume an EBITA of between say 70 and 90m depending on pipeline transport costs. At a 7/1 PE that would put the market cap @ between $490m and $630m. Market cap currently is around $100m. That converts to a share price of 75c plus useing the lower figure. When the second quarter results after NGP connection come out and confirm these figures then it is logical to assume a share price in that vicinity. This is ignoring Dukas and any further gas sales made possible by the NGP. With energy, clients need certainty, saying we will be able to deliver gas and proving you can deliver is a whole different ball game , so any number of clients could materialize. After connection it will be possible to production test the new well @ Palm Valley. This could be a SP driver as well. On that issue there has been some negative commentary ; I agree with the decision to cease drilling once commercial gas was found and I agree with the decision to test after connection. Clearly there is little management can say regarding this well until it is tested so negative commentary is invalid.
All in all I dont see an SP of $1.00 as unrealistic but it will take time (unless the Dukas wildcat is positive). So connection in December through January and then the second quarter results after means sometime in july/august. A 7/1 PE ratio may not be achieved until a dividend is issued and as they have a substantial debt to erase this may take a year to eventuate . So Fred Flintstone maybe you can just skip the gas and go to electric if you can hold for 12months.
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